Static batching is a feature where we feel like the technical problems it causes internally are worse for Entities Graphics than the benefit it brings. We prefer to try to optimize the BatchRendererGroup path instead, so you can get good performance without static batching.
Packing meshes into submeshes will not be exactly the same as static batching. Let me try to elaborate on this a bit.
Static batching works by essentially packing the objects into submeshes like I suggested, such that the transforms of the objects will be baked into the vertex buffer. This uses a lot of memory, because every object needs their own vertices, even if many objects would be sharing a mesh otherwise. At runtime, Unity will cull objects normally, and if after culling and sorting it discovers that it’s rendering consecutive submeshes (let’s say submeshes 3,4,5,6), that have exactly the same properties, then it will render those with a single draw call. If the submeshes are not consecutive (let’s say submeshes 3,5,7,9), then you will get 4 draw calls, but they will be cheap draw calls. As far as I know, there is no index buffer updating happening, so the draw call count depends on what is visible, and which visible objects happened to be next to each other.
If you have the same situation with manually packed submeshes using Entities Graphics, you will always get 4 cheap draw calls, and it will be similar to the non consecutive submeshes situation. It is possible that this is still slower than static batching, but it should be faster than having 4 completely separate meshes, so it should hopefully give you a performance increase.
Regarding LODs, those should only hurt instancing if the actual meshes are unique. Entities Graphics is capable of batching together instances across many LOD levels in cases where the LOD meshes are the same, provided that the instances also have the same Material and belong to the same Entities Graphics batch. For example, if you have 8 objects with the same mesh and 4 LODs each, and you have two visible LOD0, one visible LOD1, no visible LOD2 and five visible LOD3, you should get three instanced draw calls with instance counts 2, 1, and 5.